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(Alliance News) - easyJet PLC on Thursday said it expects demand for the next three years to be lower than in 2019 as it announced plans to cut the number of people it employs and the number of planes it flies.
The stock was trading 7.7% higher at 763.40 pence each on Thursday morning in London.
The low-cost airline confirmed its plans to resume flights on June 15, adding that booking trends on the scheduled flights have been encouraging with the demand indications for summer 2020 showing improvement, albeit from a low base. Bookings for winter are well ahead of the equivalent point last year, including customers who are rebooking coronavirus-disrupted flights for later dates.
easyJet said that in its financial fourth quarter to the end of September, it expects to fly around 30% of the planned capacity flown in the comparative period a year ago.
"The levels of market demand seen in 2019 are not likely to be reached again until 2023," the company said.
In an effort to cut spending, easyJet said it plans to reduce staff numbers by up to 30%.
It also said it is in talks with "an active lessor market" interested in acquiring aircraft from its fleet on a sale and leaseback basis, adding that it expects to see proceeds of between GBP500 million to GBP650 million. The airline's year-end 2021 fleet size is expected to be at the bottom end of its fleet range at around 302 aircraft, 51 aircraft lower than previously expected before the Covid-19 outbreak.
For shoring up easyJet's finances, the staffing and fleet plans come in addition to borrowing activity. The signing of two term loans totalling GBP400 million, fully drawing down revolving credit facility, and issuing GBP600 million of commercial paper through the UK government-backed Covid Corporate Financing Facility are expected to provide additional liquidity of around GBP2.0 billion.
"We remain focused on doing what is right for the company and its long-term health and success, following the swift action we have taken over the last three months to meet the challenges of the virus. We want to ensure that we emerge from the pandemic an even more competitive business than before, so that easyJet can thrive in the future," said Chief Executive Johan Lundgren.
Full results for the six months to March 31 will be published on June 20, the company said.
By Ife Taiwo; ifetaiwo@alliancenews.com
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